City of Los Angeles v. Centex Telemanagement, Inc.

The City of Los Angeles (City) appeals the dismissal of its action against Centex Telemanagement, Inc. (Centex) for money due on an unpaid tax assessment on grounds the action was barred by the statute of limitations.

Centex provides telecommunications management services for a fee to small and medium-sized businesses located in the City. Centex paid the City an annual business tax based on the amount of these fees.

In June 1987, Centex filed a claim for a refund of its previous year’s business tax. The City then informed Centex it was beginning an examination of Centex’s business tax liability for 1986 and 1987.

On June 27, 1988, the City notified Centex that its examination had resulted in additional liability in the principal amount of $38,048.05. On September 16, the City issued to Centex a notice of tax due which stated in part that if payment was not made by October 17, 1988, there would be an additional penalty of $6,564.71. When Centex failed to pay the tax, the City, on November 3, 1988, sent Centex a second letter that referred to “delinquent” amounts and informed Centex if it failed to pay its tax liability before November 30, 1988, additional interest would…